Developing Mozambique’s coal industry

At the beginning of October, Mozambique’s government announced that it had secured US$ 500 million of funding for a new railway line to link the coal-rich mines in Moatize to Nacala port by 2015. According to the country’s transport minister, the funding, which was coming from the Dutch and Danish governments and the EU, means that construction could begin by the end of the year.

The Sena railway already exists between Moatize and the port of Beira, but this was never completely refurbished after Mozambique’s devastating civil war and Beira is now too silted to handle large vessels. The project will include linking the Sena line to the Nacala-Malawi railway, which runs to the deepwater port at Nacala, refurbishing the Nacala-Malawi line, and dredging Beira port.

The Zambezi coal project

Elsewhere, Riversdale Mining Ltd has announced the first coal resource estimate for its EPL946L tenement (the Zambezi Project),near Tete, Mozambique. The project is the company’s second major coal project in the Moatize Basin and is adjacent to the Benga coal project.

The Zambezi Project is a similar structure to Benga, with 22 coal seams outcropping over a strike length of 14 km across the northern portion of the tenement. Drilling has delivered an indicated coal resource of 1.7 billion t, estimated in accordance with the JORC Code (2004).This is based on 120 boreholes, comprising 40,000 m of drilling, conducted over the past year.

According to Riversdale Mining executive chairman, Michael O’Keeffe, Zambezi has similar coal to Benga, but is likely to be a significantly larger-scale operation. This will help to position Riversdale as a preferred supplier to the steel industry in Brazil and India.

Based on washability analysis, potential coal products after benificiation comprise export-quality hard coking coal and a secondary thermal coal product with high energy value (>5500 Kcal/kg), suitable for the Indian and African markets.

The company has now committed to determine the feasibility of the project, appointing a chief mining engineer to commence the pre-feasibility work on the project.

Zambezi River barging

In addition to the Zambezi coal developments, Riversdale has completed a series of studies on the Zambezi River to confirm the viability of large-scale barging of coal to an offshore floating trans-loading vessel.

The company anticipates that the barging feasibility study and EIS will be submitted to the government of Mozambique in H2 2010. Thus far, no physical impediments to coal barging have been found,although some dredging might be required on sections of the river.

Implementation of large-scale barging will depend on completion and approval or an EIS and Envionmental Management Plan;licensing by Mozambiquan authorities for barging and trans-loading operations over the 560 km of the river from Tete to Chinde at the river mouth; and stakeholder and community consultation in the Zambezi River Valley.